FISCAL NOTE
Date Requested: March 15, 2017
Time Requested: 01:24 PM |
| Agency: |
Alcohol Beverage Control Administration |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2866 |
Introduced |
SB479 |
|
|---|
| CBD Subject: |
Alcoholic Liquors and Beers |
|---|
|
FUND(S):
General
Sources of Revenue:
General Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This bill purports to permit Sunday bottle sales of liquor from licensed retail liquor outlets for off-premises consumption beginning at 1 pm until midnight.
The Committee Substitute for the bill also sets the state's minimum markup at 28% and removes the Commissioner's flexibility to respond to the market or revenue demands.
This bill will have a negative impact on the state's revenues. the Commissioner has provided 73 day's notice to all retail liquor outlets and liquor distillers/importers that he has schedule the markup to change to 32% effective May 1, 2017. Depending on various estimates this could generate between $2.5 million to $4 million of revenue. However, the bill would remove the ability to generate this revenue.
Further, after speaking with industry members, many felt Sunday sales were merely offset sales from other days during the rest of the week. Currently most people would plan their purchases around Sunday. This would add some flexibility for people's purchasing decisions but not more than that.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2017
Increase/Decrease
(use"-") |
2018
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
-4,000,000 |
-4,000,000 |
-4,000,000 |
Explanation of above estimates (including long-range effect):
As noted above, the change of wholesale markup to flat 28% will result in a loss of revenue possibly up to $4,000,000.
The wholesale markup was set 25% in 1990 and in 2003, 13 years later, the Commissioner changed it to 28%. The Commissioner has now changed the wholesale markup to 32%, 14 years later.
Memorandum
This is a poor bill tying Sunday sales that have a neutral revenue impact due to tradeoff or offset sales with the Commissioner's authority to respond, as any business, to maintain revenue or adjust costs in the real time of the marketplace.
Currently, liquor distillers/importers can adjust their price quarterly. With this bill, the State could not adjust its markup in real time, if needed.
The WV Retailer's Association whose members operate the 178 retail liquor stores statewide stated in testimony that they are neutral on Sunday sales and are not pushing this bill. Further, the association testified that they support the Commissioner's authority to set the markup and understand that from time to time the markup has to change.
This bill is being pushed by a national group the Distilled Spirits Council (DISCUS) who opposes all forms of alcohol taxation and want Sunday sales. DISCUS' members have not complained to the WVABCA about the markup and a few of heir members voiced there support for the WVABCA.
Person submitting Fiscal Note: Anoop Bhasin,General Counsel on behalf of WVABCA
Email Address: Anoop.K.Bhasin@wv.gov